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BATES V. PO
NOTE
Basis of an appeal
1. The first point to make is that we will need to be clear as to
what parts of the Judgment we can (and will) live with- and
those which we wish to challenge. We must be disciplined and
identify the particular (main) points — rather than falling into
the (obvious) trap of seeking to appeal everything. The Court
of Appeal only has limited patience and appetite. There is a
danger if we throw everything in — then we will leave with very
little.
2. Permission to appeal is required and must be based on
demonstrating that there is a “reasonable prospect” of showing
an error of law. Put very simply, such error can either be:
(a)In the construction of a document or application of a
principle of law.
(b) A finding made following a serious procedural irregularity.
(c)A finding of fact which was not open to the Judge (ie. close
to perverse) and which should not have been made. This is
very much harder than an appeal under (a) — and is
discouraged by the Court of Appeal as it requires extensive
and time consuming study of transcripts of evidence.
3. Permission to appeal must be obtained either from the Judge
or from the Court of Appeal (in the notice of appeal). The Judge
is unlikely to grant permission. There is an outside possibility
that he could grant permission on the “relational contract”
point. But it is very unlikely given the tone of the Judgment. We
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will not be in a position to seek permission by next
Friday/following Monday (in all likelinood) as we would like to
have the opportunity to properly prepare draft/ grounds of
appeal to put in front of him— but will probably need to appear
before him subsequently on a Friday during the Horizon trial.
. Generally the Court of Appeal considers permission to appeal
applications on the papers alone — without a hearing. But it can
order a hearing if it considers it necessary. It is therefore
important to ensure the paper application is as strong as
possible as there is no right to an oral hearing. The appeal
could be rejected on the papers alone and then that is the end
of the appeal. Given the issues and nature of this case I think it
likely that the Court of Appeal would order a hearing.
. Notice of appeal (to the Court of Appeal) must be filed within
21 days of the hand down of the Judgment — unless extended.
The Judge has already indicated that he is minded to extend
this time period.
. Optimal timing — is as soon as possible. But it is important that
time is taken to do the job properly, to (a) interest the Court of
Appeal in what has gone wrong here, and obtain permission
from them; (b) appeal the right points in the right way. We
should give ourselves at least a month from hand down of the
judgment to do a proper job on this - ideally longer as most of
the team are going to be involved in the Horizon trial during
this period. An appeal requires both grounds of appeal and the
skeleton argument in support. This is a very significant task and
an important one. There is a lot of material to be picked
through.
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Prevent judgment being handed down/stayed pending an appeal
7. There is no possibility in this case of preventing hand down of
the Judgment.
8. As to a “stay”, there is no “act” PO have been ordered to do
under this judgment which is capable of being stayed. The
Court has (or should have) declared the legal nature and effects
of two species of contract and the relationship arising out of
that. There is nothing to stay.
9. We should ask the Judge at the handing down to order that
Trial 3 be stayed in the event that permission to appeal is
granted by the Court of Appeal. I say this because that trial is
applying the results of the Common Issues trial —which will be
under appeal. If he refuses (which he has indicated he is likely
to do) we will appeal that ruling to the Court of Appeal at the
same time as the other matters.
Target/merits of appeal
10. I consider that the appeal should definitely have two main
limbs - which I will expand upon below:
(1) His errors in construing the SPMC and NTC contracts, the
terms to be implied into them, and the relationship that
arose as a result- together with the issues on
onerous/unusual and UCTA. That is the straightforward
“standard” appeal.
(2) The gross procedural unfairness exhibited by his making
findings of fact on unnecessary matters based on partial
information and, the use of such and other findings of fact
which he fed into (1).
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11. I consider that Post Office should also carefully consider
whether the conduct of this judge in this matter under (2) is so
serious such that a reasonable independent observer would
think that he is biased (whether or not he is) — and should
therefore seek his removal as “Managing Judge” of this GLO.
There is a very high threshold to justify such an application.
This is undoubtedly the nuclear option — but this Judgment is
very bad indeed. The way he has conducted himself in this
matter in my view is unjudicial and is unprecedented.
Procedural irregularity appeal
12. I consider that there are good grounds to launch an
appeal on the basis of gross procedural irregularity.
13. Take for instance the way he criticizes the evidence of
Angela — mainly because she did not cover all the topics he
would have liked (see: para.544). But that was because — as
she made clear- she was advised it was irrelevant (which it
was). As to this:
(1)We had virtually no responsive evidence on the irrelevant
evidence they introduced. He knew this and repeatedly
comments (adversely) on our lack of evidence.
(2)We told him repeatedly that that material was irrelevant
AND that we could not fairly respond.
(3)At trial Claimants did not seek to justify the legal
admissibility of most of the material. There was a very
obvious risk they were trying to skew his perspective.
(4)There was no good reason for him to comment at all — and
he was specifically warned of the risk of so doing (see: para
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35) -given his role in future litigation. He did not have to
make any findings on it for the purposes of resolving any of
the issues — applying the law in the way he says he was
doing.
14. In that context, the decision to comment at all
demonstrates hostility (or would be perceived by an
independent observer as doing so). It would seem to be an
attempt to chasten Post Office — and that must involve an
assumption that Post Office will lose on the relevant issues.
15. The softer way to get in the subject of procedural
irregularity — and his possible recusal — is to concentrate on the
extent to which he has over-reached himself and made findings
or indicated a particular stance in relation to questions that will
need to be determined in the future. And has done so without
hearing all the relevant evidence from both sides. As such he
has placed himself in a positon whereby he can no longer be an
independent tribunal. In this way — we can make the Court of
Appeal more comfortable with the possible suggestion of the
Judges removal as the Managing Judge without seeking to
castigate him unduly for all his other potentially bad
behaviour-— which they will be very unlikely to do.
16. At one point he criticizes all Post Office’s witnesses for
thinking there is nothing wrong with the Horizon system
(para.545). Unless it is unreliable this comment makes no
sense. He is criticizing PO witnesses for having a view which
might be correct — depending on the decisions he makes in
subsequent stages.
17. There are many examples of this type of behaviour
sprinkled throughout the judgement. By way of example:
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(1) Making of GLO “opposed by Post Office” (para.12) — notable
“Post Office did not seek to appeal” making of the GLO- this
is untrue and he has been told this before and actually been
sent the relevant correspondence evidencing this.
(2)Post Office style of giving evidence: glide away from
pertinent questions (para.375).
(3)Makes no findings BUT PO attitude could be perceived as
“threatening, oppressive .....” (para. 517 and 519).
(4)Post Office appears determined to fight every issue, make
resolution of this intractable dispute as difficult and
expensive as it can” — a rant, untrue, and no particulars or
examples given.
(5) “Post office edifice would collapse” (para.123). This suggests
general pre-judgment by him.
(6) Excessive secrecy — redacting names on emails:
(para.560(1)) — when PO received them in this form. “I do
not consider that they can be a sensible or rational
explanation for any of them...” Importantly, he is making
independent inferences, not based on the Claimants’
submissions, and on which Post Office has had no
opportunity to comment.
(7)Finding all the facts in para.569 which were not necessary
and which he did not apply. Including findings on Horizon
(see:eg. Fact 34) — which he expressly said he was not going
to make. See also (para.819) on this.
(8)lmpose draconian effect upon SPM’s — behave with
“impunity and oppressively” (para.722). And para.222
(oppressive behaviour).
(9)PO answer to nobody but themselves and wield power with
impunity (para. 524 and 724)
18. These are not just findings in the case that he should not
be making because they are not relevant to the findings that he
is making. They are also indications of his attitude to PO —
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which will be applied as Managing Judge going forward. They
are very extreme comments — and completely unjustified.
19. Someone needs to be tasked with identifying them all.
We will then be in a better position to advise on whether
seeking to remove him is the right way to go. It is certainly a
dramatic option of last resort. I have never had occasion in 25
years of practice to even consider doing so. There is a very high
threshold to pass and the Court of Appeal would need to be
persuaded this was not just a disappointed litigant seeking to
take it out on a Judge with whom they disagreed. The other
side will obviously object and say that all his knowledge/
familiarity with the case makes it essential he remains the
Managing Judge.
20. The fact that he is the Managing Judge in a GLO and so is
due to hear future trials is a special and odd feature of this
case. In a normal one off case, a Judge can, in effect, sound off
as much as he likes. Here — this behaviour and these comments
may well indicate at the very least an appearance of bias. As
noted above, by concentrating on the fact that he has made
adverse findings which he should not have made in this trial on
the evidence before him — should be the main focus- as the
Court of Appeal will be more comfortable with that.
21. The problem with making such an application is obvious —
particularly if it does not succeed. And it would appear that the
normal procedure is to first make the application to the Judge
to recuse himself (as recently occurred in the British Airways’
Air Cargo case; although the Court of Appeal has suggested it
would be better, if possible, for another judge to hear a recusal
application, in practice that largely lies within the discretion of
the original judge: El Farargy [2007] EWCA Civ 1149). And then
appeal that when he refuses. With all that that entails.
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22. That said, if we get before the Court of Appeal and they
are interested (and shocked) by the procedural irregularity
points — then if we have not made the application to remove
him — they have very few options other than to return the case
to him. The prospect of appearing back before the Judge
following a successful appeal against his judgement (including
for serious procedural irregularity) seems to me to be sub-
optimal.
23. It might even be worth instructing separate Counsel to
consider this point on recusal — as having been so involved in
this it is difficult to be truly objective. And this is not a normal
situation. Also, given the Horizon trial is about to begin
tomorrow any such application would need to be heard after
that case had concluded — but not necessarily before he had
handed down judgment.
24. But whether or not we mount an application to remove
him — we should appeal against factual findings he has made on
the basis of procedural irregularity. These facts will need to be
chosen with care- but will include factual findings made against
PO witnesses where possible.
25. Our position would likely be that a re-trial (which is a
theoretical possibility) is not necessary. Otherwise our
approach will be very unattractive. Our position would be that
the Court of Appeal can determine what the law is — and all
these facts he has found are (largely irrelevant). As to those
adverse findings of fact —- we would ask that they be quashed.
This would leave the findings of fact on the individual Claimant
and what documents they received etc. We would need to
decide if we could live with them — in the individual cases. I
think it would be difficult to attack them.
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26. It would be a good idea if someone could prepare a table
of all the adverse factual findings he has made — and analyse
the precise procedural unfairness and the evidence we could
and would have brought to bear on the issue if we had known
that this was the course he was going to take.
Standard Appeal
27. The standard appeal raises a very large number of issues.
Two opening general points:
(1)there is no reasoning in the Judgment or authority or point
raised by the Judge or the Claimants that persuade me that
the legal analysis provided to Post Office in our Opinion is
wrong.
(2)Although he denies it, it is clear that the Judge has made a
significant error identified by the Court of Appeal in Bou
Allan — namely to decide questions of implication (and in this
case construction) based on what happened post contract.
That is what the huge weight of evidence and adverse
findings go to. The law clearly provides that he must judge
the matter as at the date of contracting. But it is clear that
he did not. This is something that we warned him about
constantly. It is a huge error. His attempt at justification (at
para.568) is in my view weak.
28. Given the early stage (and haste) with which this Note is
being provided I am not going to deal with each of the very
many issues we might want to appeal — but will deal with the
main issues by way of the main themes and only briefly. I
consider that PO have reasonable prospects of success (where
indicated) on the matters set out below:
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(1) Incorporation: We are stuck with his factual findings about
who received what bit of paper and when they did so - as
this relates to the contractual documents. These are
findings of fact that it will difficult to sensibly challenge. That
said, the Bates non-receipt of contract is tempting to appeal
simply because his reasoning shows how biased he is.
(2) Clause 12 12 of SPMC: Burden of proof: He is wrong as a
matter of construction of that clause. This is a matter I
would appeal on. He (deliberately ?)
misstates/misunderstands our argument that the loss or
deficiency covered by the clause must first be demonstrated
by PO as regards potential bugs in Horizon. Paragraph 674
shows that he is confusing the proper meaning of the clause
on the one hand, and how he saw it potentially operating on
the other. He is thoroughly confused. An allied and crucial
point is his construction of the word “loss” meaning real loss
and requiring Post Office on the face of it to be able to
demonstrate a “real loss” to be able to recover (para.687)
and not to be able to rely on the Branch Trading Statement
to demonstrate this. However this point is unclear and needs
clarification by him when handing down judgment —see:
e.g.paras. 842 and 853. This point also inter-leaves with the
implied term (m) — dealing with the steps necessary by PO
before it can enforce a debt. What is not clear, and needs
clarifying — is the inter-relationship between say a “clean”
BTS and a later claim by a SPM that it should have contained
various amendments/changes. What is the role, if any, of
his meaning of “loss” and of the procedure set out in
implied term (m) in such a situation ? This is obviously
crucial.
(3) Clause 4.1: Construction: He should have construed this as
involving (implicitly) a fault based system: akin to clause 12
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12. Given that he has implied clause 12 12 into the NTC
query whether this is a satisfactory outcome — or whether
we would appeal this? Note that he has not implied the
second part of the clause dealing with assistants (para.1103)
- query whether the SPM would be vicariously liable for their
acts given that he employs them? We have reasonable
prospects of success on the construction of this clause. He
construed it narrowly so he could then (cynically) strike it
down as unreasonable under UCTA.
(4) Termination on notice clauses - both SPMC and NTC: “not
less than” wording is relatively standard and does not mean
it is a discretion and must be exercised in good faith etc. We
have a strong argument on this — and this has wider
application in the law of contract. The Court of Appeal can
be expected to be very interested in this.
(5) Implied term of good faith/fair dealing: we have a
reasonable prospect of success in persuading the Court of
Appeal that this is not a “relational contract” — and even if it
was, the terms implied on the back of that (both the good
faith/fair dealing) and the many “incidents” of that implied
term are not “necessary” — particularly given the Agreed
Implied terms — which he all but ignored (and indeed
dismissed, oddly, as ona ‘pleading point’. This is
astonishing). Again — the Court of Appeal can be expected to
be very interested in how far the judge appears to have
taken this concept.
(6) Implied terms based on necessity alone: we have a
reasonable prospect of success on each of the terms he
implies on this basis, that is, (a) to (d), (m) (n),(0)(q)(r)(t) and
(u). I agree that implied term (m) is particularly onerous and
difficult to justify.
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(7) Finding that the Branch Trading Statement is not subject to
the normal rules of agency is difficult to justify - and we
have a reasonable prospect of appeal on this point. It is not
clear to me what the Judge’s position on this is as he only
deals with a BTS in a period where the SPM has notified a
dispute. It was and remains our position that a SPM cannot
be “bound” by a BTS in relation to entries that he disputed at
the time of submitting such BTS (although the Judgment
does not record this). What of the position of a BTS for a
period where there is no such dispute — and then in the
litigation they try and re-open it? That was, and is, obviously
an important example. As noted above, we need his urgent
clarification on the BTS and how, in his view it operates with
the SPMC and NTC.
(8) Onerous and unusual: I do not think that the notice
provisions or the exclusion of compensation for “loss of
office” are “onerous and unusual” — and I think we have
reasonable prospects of persuading the Court of Appeal of
this.
(9)For the NTC: I think we have good arguments that signing
the NTC and being told to take legal advice were sufficient. I
would expect the Court of Appeal to agree. The SPMC turns
on individual facts - as to what “notice” they were given.
(10) UCTA: I consider that we have good arguments that UCTA
does not apply to this contract — and also that clause 4.1 is
not unreasonable within the meaning of the Act. The judge’s
attempt to distinguish the relevant authorities was weak. I
reach a similar view about the termination provisions
considered at paragraph 1107.
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(11) Regarding suspension and depriving SPM of payment —
we conceded an implied term which the Judge seems to
have ignored when considering UCTA?
DCQC 10/3/19
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